$\begin{array}{lr}\text { Sales } & \$ 185,000 \\\text { Operating income } & \$ 60,000 \\\text { Operating assets } & \$ 375,000\end{array}$

question 46

Multiple Choice

$\begin{array}{lr}\text { Sales } & \$ 185,000 \\\text { Operating income } & \$ 60,000 \\\text { Operating assets } & \$ 375,000\end{array}$ The manager can invest in an additional project that would require $40,000 investment in additional assets and would generate $6,000 of additional income. The company's minimum rate of return is 14%.
-Refer to Figure 12-2. Which of the following statements is true?

• A) If the manager invests in the additional project, ROI of the division will decrease.
• B) The residual income of the project is less than the residual income of the division without the project; therefore the project will be rejected.
• C) Average investment for Stock Division will decrease if the project is accepted for investment.
• D) If the manager invests in the additional project, residual income of the division will increase.
• E) None of these.

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Definitions:

Chronic Renal Failure

A long-term medical condition where the kidneys lose their ability to filter waste and excess fluids from the blood effectively.

Poisons

Substances that can cause disturbances to organisms, typically by chemical reaction or other activity on the molecular scale, when an organism absorbs a sufficient quantity.

Alcohol Abuse

Alcohol abuse is the pattern of drinking that results in harm to one's health, interpersonal relationships, or ability to work.

Acute Renal Failure

A rapid loss of kidney function, characterized by a decrease in urine production and accumulation of waste products in the blood.